Assess whether Q1 rush demand will continue beyond the first half

FY2027 Q1 sales were ¥31,753 million, up ¥5,545 million from ¥26,208 million in the same period of the previous year. Operating profit also increased by ¥2,378 million, from ¥2,820 million to ¥5,198 million, lifting the operating margin by 5.6 percentage points from a calculated 10.8% to 16.4%. On the surface, operating profit growth was stronger than sales growth, indicating a strong start to the first half.

The company, however, identified a sharp increase in orders, apparently reflecting rush demand from customers concerned about shortages of materials such as thinner and future price increases, as the main driver of higher sales. It also said that the pass-through of higher costs to selling prices, expense reductions and efficiency gains, and foreign exchange gains contributed on the profit side. It did not provide a quantitative or monetary breakdown showing how much of sales came from rush demand and how much from normal demand. Since neither the value of orders received nor order backlog has been disclosed, it is not yet possible to determine whether Q1 sales of ¥31,753 million reflect sustainable demand or include sales brought forward.

The full-year plan calls for sales of ¥112,000 million and operating profit of ¥11,400 million. At the end of Q1, progress was 28.4% and 45.6%, respectively, leaving ¥80,247 million in sales and ¥6,202 million in operating profit to achieve the plan. After deducting Q1 results from FY2026 actual results, the corresponding amounts remaining were ¥83,499 million in sales and ¥9,398 million in operating profit. Thus, compared with the remaining period of the previous year, the remaining period under the company’s plan is 3.9% smaller in sales and 34.0% smaller in operating profit. This suggests that, while assuming a strong Q1, the company may be factoring in a demand backlash and lower margins from Q2 onward.

In FY2027-H1, the first points to confirm are whether sales exceed ¥56,000 million, equivalent to half the full-year plan, and operating profit exceeds ¥5,700 million. In particular, it will be important to see how much is added to Q1 operating profit of ¥5,198 million by the cumulative Q2 results. The disclosures available this time focus mainly on the full-year forecast and do not provide quantitative assumptions for first-half demand or progress in orders. The focus will therefore be on whether the next results announcement discloses orders received, order backlog, the amount of the backlash in rush demand, and the extent to which normal demand has replaced it.